24, 2007) Construction union representatives kept up the heat
on Cabela's sporting goods at today's Reno City Council meeting.
In the latest of a continuing series of presentations before the body
over the past several weeks, Paul McKenzie, business representative
of the Building and Construction Trades Council of Northern Nevada/AFL-CIO,
noted the deficiencies in the huge sporting goods chain's taxpayer-subsidized
McKenzie told officials that a June 27, 2007, city staff report presented
to the council used unaudited projections of Cabela's retail sales figures.
McKenzie asked if the city's consultant, Meridian Business Advisors,
confirmed Cabela's estimates that its currently under-construction megastore
in Verdi, east of Reno, could actually generate the $28 million in annual
sales projected for it. McKenzie questioned the assumption, given that
the average Cabela's location grosses about $14 million per year, according
to Cabela's SEC reporting for 2006.
McKenzie called the council's attention to page seven of the draft STAR
(sales tax anticipation revenue) bonds ordinance included in the city
staff report regarding the definition of costs of the project. He noted
that page eight additionally includes property rights, easements and
demolition expenses as subject to STAR bond public financing.
Therefore, McKenzie concluded, any work involved in moving part of the
Boomtown Hotel-Casino truck stop, which is adjacent to the Cabela's
location, would be subject to the Nevada Prevailing Wage Law (as outlined
in Nevada Revised Statutes section 271A.130 which regulates STAR bonds).
City staff thus far has disputed that any work to move part of Boomtown's
truck stop is subject to the prevailing wage law.
John Seymour, Business Representative of International Brotherhood of
Electrical Workers Local 401/AFL-CIO, informed the council that half
of the electricians currently working on the Cabela's project are unlicensed.
Four of eight individuals noted on certified payroll records on file
with the Nevada Labor Commissioner have been working illegally, Seymour
His comments were rebutted by former Washoe County Manager John MacIntyre,
now a consultant to the City of Reno on construction projects. MacIntyre
asserted that Mr. Seymour was using reports which have since been updated.
He added that all of the electricians on the Cabela's project are now
certified and that new ones will be certified before beginning work,
as opposed to the previous procedure of assessing certification after
hire which means that Mr. Seymour was correct in his assertions
of the use of uncertified electricians.
Are STAR bonds a reward for unethical behavior?
(Reno, Nev., June 25, 2007) When Cabelas selected Layton
Construction from Arizona as the general contractor to build its retail
store near Boomtown, we hoped they didnt expect the project to
be surrounded by controversy, but it has been. From failure to follow
wage laws to refusal to abide by reporting requirements, it has been
a constant battle to keep Layton and its subcontractors in compliance
with Nevada state law.
Now Layton is being investigated
for violation of Nevadas contracting laws as the company allegedly
solicited bids and entered into contracts with non-licensed contractors.
"Granted Cabelas is the first STAR
(sales tax anticipation revenue) bonds
project in the state, but that should not be an excuse for ignoring
the law," stated Building Trades Business Representative Paul
"The City of Reno will
look at finalizing the STAR bonds process this Wednesday (6-27-2007),
and they should take a long look at Cabelas and their general
contractors lack of respect for the law," McKenzie said,
"and the taxpayers of Reno should be concerned with the approval
of the first $40.5 million of tax incentives lined up for Cabelas.
"That would hire a lot
of police officers," he noted.
"On top the money, the
city abandoned Garson Road and donated it to the Cabelas project.
That, my fellow taxpayer, is a lot of incentive," McKenzie stated.
By viewing the staff
report for Wednesdays meeting and doing a little math, Cabelas
expects to generate over $27 million in sales their first year in business
here in Reno. They are expecting a lot as their other 20 stores only
generated $304.9 million last year combined, according to their 2006
SEC reporting. This is the minimum amount they need to make the payment
on the bonds they are expecting to receive.
Public records show this is not the first corporate welfare experience
for Cabelas as they are building stores throughout the United
States using taxpayers money. A glance
at their website shows this is one of the requirements of building a
store in any area, the willingness of the government to pay them to
Starting in November of last year, the Building Trades Council has monitored
Cabelas and constantly brought violations of the law to the attention
of the city council. While the city council has acted quickly to bring
Cabelas back into compliance, why should Cabelas, which
claims to be a good citizen, have to be watched to assure they follow
"If you or I run a stop
light, we dont get told not to do it again, we get a ticket. Is
Cabelas going to get a $24 million reward for their unethical
behavior? " McKenzie asked.
"The taxpayers we represent
at the Building Trades Council certainly hope not, but well be
at the City Council meeting on Wednesday to see", he concluded.
from State of Nevada Contractors Board to Layton Construction